AMC Entertainment Posts Record Earnings Even as Film Rentals Rise
The company said revenue rose 13 percent to $821.1 million.
Theater-chain AMC Entertainment said Wednesday it recorded record financial results in the second quarter as the average price for a ticket rose to $9.91 and each patron spent $4.65 on food and beverages.
The company said revenue rose 13 percent to $821.1 million while net earnings jumped 39 percent to $43.9 million.
Due to the top three films released in the quarter — Jurassic World, Avengers: Age of Ultron and Furious 7 — the industry box office grew 9.4 percent and attendance grew 5.9 percent, fueling AMC's record results, CFO Craig Ramsey said. At AMC, attendance was 53.8 million, an increase of 7.3 percent.
The downside to so much business concentrated in three blockbusters is that film rentals — the amount paid to studios — was up to 55.4 percent of admissions revenue, leading to a 15 percent increase to $295.4 million during the quarter.
Earlier this week, Carmike Cinemas also reported that film rentals rose in the second quarter, causing a 7 percent sell-off in its stock. AMC shares rose 2 percent in regular trading on Wednesday but were giving back more than half the gains after the closing bell.
Outgoing AMC chief executive Gerry Lopez, during a conference call with analysts, stressed that the rising film rentals is not a trend but a phenomenon unique to the quarter due to the fact that three movies accounted for 43 percent of the industry box office in the three-month period. By comparison, in the same quarter last year, the three top films represented just 24 percent of the industry's total box office.
The price of an AMC ticket rose 4 percent and the average amount spent on concessions was up 10.2 percent per moviegoer, the company said on Wednesday. The company ended the quarter with 5,031 screens at 350 locations.